[Federal Register Volume 87, Number 72 (Thursday, April 14, 2022)]
[Rules and Regulations]
[Pages 22103-22105]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-07975]



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Rules and Regulations
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents 
having general applicability and legal effect, most of which are keyed 
to and codified in the Code of Federal Regulations, which is published 
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents. 

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Federal Register / Vol. 87, No. 72 / Thursday, April 14, 2022 / Rules 
and Regulations

[[Page 22103]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 906

[Doc. No. AMS-SC-21-0065; SC21-906-1 FR]


Increased Assessment Rate for Texas Oranges and Grapefruit

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule implements a recommendation from the Texas Valley 
Citrus Committee to increase the assessment rate established for the 
2021-22 and subsequent fiscal periods. The assessment rate will remain 
in effect indefinitely unless modified, suspended, or terminated.

DATES: Effective May 16, 2022.

FOR FURTHER INFORMATION CONTACT: 
    Abigail Campos, Marketing Specialist, or Christian D. Nissen, 
Regional Director, Southeast Region Branch, Market Development 
Division, Specialty Crops Program, AMS, USDA; Telephone: (863) 324-
3375, Fax: (863) 291-8614, or Email: [email protected] or 
[email protected].
    Small businesses may request information on complying with this 
regulation by contacting Richard Lower, Market Development Division, 
Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW, STOP 
0237, Washington, DC 20250-0237; Telephone: (202) 720-2491, Fax: (202) 
720-8938, or Email: [email protected].

SUPPLEMENTARY INFORMATION: This action, pursuant to 5 U.S.C. 553, 
amends regulations issued to carry out a marketing order as defined in 
7 CFR 900.2(j). This rule is issued under Marketing Agreement No. 121 
and Marketing Order No. 906, both as amended (7 CFR part 906), 
regulating the handling of oranges and grapefruit grown in the Lower 
Rio Grande Valley in Texas. Part 906, (referred to as ``the Order'') is 
effective under the Agricultural Marketing Agreement Act of 1937, as 
amended (7 U.S.C. 601-674), hereinafter referred to as the ``Act.'' The 
Texas Valley Citrus Committee (Committee) locally administers the Order 
and is comprised of producers and handlers of oranges and grapefruit 
operating within the area of production.
    The Department of Agriculture (USDA) is issuing this rule in 
conformance with Executive Orders 12866 and 13563. Executive Orders 
12866 and 13563 direct agencies to assess all costs and benefits of 
available regulatory alternatives and, if regulation is necessary, to 
select regulatory approaches that maximize net benefits (including 
potential economic, environmental, public health and safety effects, 
distributive impacts, and equity). Executive Order 13563 emphasizes the 
importance of quantifying both costs and benefits, reducing costs, 
harmonizing rules, and promoting flexibility. This action falls within 
a category of regulatory actions that the Office of Management and 
Budget (OMB) exempted from Executive Order 12866 review.
    This rule has been reviewed under Executive Order 13175--
Consultation and Coordination with Indian Tribal Governments, which 
requires agencies to consider whether their rulemaking actions would 
have tribal implications. USDA has determined this rule is unlikely to 
have substantial direct effects on one or more Indian tribes, on the 
relationship between the Federal Government and Indian tribes, or on 
the distribution of power and responsibilities between the Federal 
Government and Indian tribes.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. Under the Order now in effect, Texas citrus handlers 
are subject to assessments. Funds to administer the Order are derived 
from such assessments. It is intended that the assessment rate will be 
applicable to all assessable oranges and grapefruit for the 2021-22 
fiscal year, and continue until amended, suspended, or terminated.
    The Act provides that administrative proceedings must be exhausted 
before parties may file suit in court. Under section 608c(15)(A) of the 
Act, any handler subject to an order may file with USDA a petition 
stating that the order, any provision of the order, or any obligation 
imposed in connection with the order is not in accordance with law and 
request a modification of the order or to be exempted therefrom. Such 
handler is afforded the opportunity for a hearing on the petition. 
After the hearing, USDA would rule on the petition. The Act provides 
that the district court of the United States in any district in which 
the handler is an inhabitant, or has his or her principal place of 
business, has jurisdiction to review USDA's ruling on the petition, 
provided an action is filed not later than 20 days after the date of 
the entry of the ruling.
    This rule increases the assessment rate from $0.01 per 7/10-bushel 
carton or equivalent, the rate that was established for the 2018-19 and 
subsequent fiscal periods, to $0.05 per 7/10-bushel carton or 
equivalent of oranges and grapefruit handled for the 2021-22 and 
subsequent fiscal periods.
    The Order authorizes the Committee, with the approval of AMS, to 
formulate an annual budget of expenses and collect assessments from 
handlers to administer the program. Members are familiar with the 
Committee's needs and with the costs for goods and services in their 
local area and are in a position to formulate an appropriate budget and 
assessment rate. The assessment rate is formulated and discussed in a 
public meeting. Thus, all directly affected persons have an opportunity 
to participate and provide input.
    For the 2018-19 and subsequent fiscal periods, the Committee 
recommended, and AMS approved, an assessment rate $.01 per 7/10-bushel 
carton or equivalent of oranges and grapefruit handled. That assessment 
rate continues to be in effect unless modified, suspended, or 
terminated by AMS upon recommendation and information submitted by the 
Committee or other information available to AMS.
    The Committee met on July 14, 2021, and recommended 2021-22 
expenditures of $43,900 and an assessment rate of $0.05 per 7/10-bushel 
carton or equivalent. In comparison, the previous fiscal period's 
budgeted expenditures were $155,720. The assessment rate of $0.05 is 
$0.04 higher than the rate currently in effect. The Committee 
unanimously voted to increase the assessment rate due to the

[[Page 22104]]

extensive tree damage from a freeze experienced in Texas occurring in 
February 2021. This February freeze decreased the 2020-21 production 
from an expected 7.5 million 7/10-bushel cartons to 3.1 million 7/10-
bushel cartons. The Committee discussed how freeze damages caused a 
depletion of financial reserves for the 2020-21 fiscal period due to 
assessment income being lower than expected. Production will be further 
reduced during the upcoming fiscal period because of freeze damage to 
trees. Estimated production for 2021-22 fiscal period has been reduced 
from 7.5 million 7/10-bushel cartons or equivalents to 1 million. At 
the current assessment rate, assessment income would equal only 
$10,000, an amount insufficient to cover the Committee's anticipated 
expenditures of $43,900. By increasing the assessment rate by $0.04, 
assessment income would be $50,000. This amount should provide 
sufficient funds to meet 2021-22 anticipated expenses.
    Major expenditures recommended by the Committee for the 2021-22 
fiscal period include $20,000 for management expenses, $13,900 for 
administrative expenses, and $10,000 for compliance. Budgeted expenses 
for these items in the 2020-21 fiscal period were $79,220, $26,500, and 
$50,000, respectively.
    The Committee derived the recommended assessment rate by 
considering anticipated expenses and expected shipments of Texas 
oranges and grapefruit. Orange and grapefruit shipments for the 2021-22 
year are estimated at 1,000,000 7/10-bushel cartons or equivalents, 
which should provide $50,000 in assessment income (1,000,000 cartons x 
$0.05). Income derived from handler assessments at the new rate, along 
with interest income, should be adequate to cover estimated program 
expenses of $43,900. Funds in the reserve (currently about $43,000) 
would be kept within the maximum permitted by Sec.  906.35 of the Order 
(approximately one fiscal period's expenses).
    The assessment rate will continue in effect indefinitely unless 
modified, suspended, or terminated by AMS upon recommendation and 
information submitted by the Committee or other available information.
    Although this assessment rate will be in effect for an indefinite 
period, the Committee will continue to meet prior to or during each 
fiscal period to recommend a budget of expenses and consider 
recommendations for modification of the assessment rate. Dates and 
times of Committee meetings are available from the Committee or AMS. 
Committee meetings are open to the public and interested persons may 
express their views at these meetings. AMS would evaluate Committee 
recommendations and other available information to determine whether 
modification of the assessment rate is needed. Further rulemaking would 
be undertaken as necessary. The Committee's 2021-22 budget and those 
for subsequent fiscal periods would be reviewed and, as appropriate, 
approved by AMS.

Final Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA) (5 U.S.C. 601-612), AMS has considered the economic impact of 
this rule on small entities. Accordingly, AMS has prepared this final 
regulatory flexibility analysis.
    The purpose of the RFA is to fit regulatory actions to the scale of 
businesses subject to such actions in order that small businesses will 
not be unduly or disproportionately burdened. Marketing orders issued 
pursuant to the Act are unique in that they are brought about through 
group action of essentially small entities acting on their own behalf.
    There are approximately 119 producers of oranges and grapefruit in 
the production area and 14 handlers subject to regulation under the 
Order. Small agricultural producers are defined by the Small Business 
Administration (SBA) as those having annual receipts less than 
$1,000,000, and small agricultural service firms are defined as those 
whose annual receipts are less than $30,000,000 (13 CFR 121.201).
    According to data from the National Agricultural Statistics Service 
(NASS), the industry, and the Committee, the weighted average free-on 
board price for Texas citrus for the 2019-20 season was approximately 
$16.20 per carton, with total shipments of around 8.2 million cartons. 
Based on this information, total annual receipts of Texas citrus 
handlers in the 2019-20 fiscal period were approximately $132,840,000 
($16.20 multiplied by 8.2 million cartons equals $132,840,000). 
Dividing by the number of citrus handlers infers average annual 
receipts of less than $30 million ($132,840,000 divided by 14 handlers 
equals $9.5 million).
    In addition, based on NASS data, the weighted average producer 
price for the 2019-20 fiscal period was around $5.65 per carton of 
Texas citrus. Based on producer price, shipment data, and the total 
number of Texas citrus producers, the average annual producer revenue 
is below $1,000,0000 ($5.65 multiplied by 8.2 million cartons equals 
$46,330,000 divided by 119 producers equals approximately $389,328). 
Thus, the majority of Texas citrus handlers and producers are 
classified as small entities.
    This rule increases the assessment rate established and collected 
from handlers for the 2021-22 and subsequent fiscal periods from $0.01 
per 7/10-bushel carton or equivalent to $0.05 per 7/10-bushel carton or 
equivalent of oranges and grapefruit grown in the Lower Rio Grande 
Valley in Texas. The Committee recommended 2021-22 expenditures of 
$43,900 and an assessment rate of $0.05 per 7/10-bushel carton. The 
assessment rate of $0.05 is $0.04 higher than the previous rate. The 
quantity of assessable Texas Citrus for the 2021-22 season is estimated 
at 1,000,000 7/10-bushel cartons. Thus, the $0.05 rate should provide 
$50,000 in assessment income ($0.05 multiplied by 1,000,000 cartons), 
which should be adequate to cover budgeted expenses for the 2021-22 
season.
    Major expenditures recommended by the Committee for the 2021-22 
fiscal period include $20,000 for management expenses, $13,900 for 
administrative expenses, and $10,000 for compliance. Budgeted expenses 
for these items in 2020-21 were $79,220, $26,500, and $50,000, 
respectively.
    The Committee recommended increasing the assessment rate because of 
the extensive tree damage from the freeze in February 2021. At the 
current assessment rate of $0.01 and with the 2021-22 crop estimated to 
be 1,000,000 7/10-bushel cartons, assessment income would equal $10,000 
($0.01 multiplied by 1,000,000 cartons), an amount insufficient to 
cover the Committee's anticipated expenditures of $43,900. By 
increasing the assessment rate by $0.04, assessment income would be 
approximately $50,000 ($0.05 multiplied by 1,000,000 cartons). This 
amount should provide sufficient funds to meet 2021-22 anticipated 
expenses.
    Prior to arriving at this budget and assessment rate, the Committee 
considered maintaining the current assessment rate of $0.01. However, 
leaving the assessment unchanged would not generate sufficient revenue 
to meet the Committee's expenses for the 2021-22 budget of $43,900 and 
would diminish reserves. Therefore, the alternative was rejected.
    A review of historical information and preliminary information 
pertaining to the upcoming fiscal period indicates that the producer 
price for the 2021-22 season should be approximately $5.42 per 7/10-
bushel carton or equivalent of oranges and grapefruit. Therefore, the 
estimated assessment revenue for the 2021-22 fiscal period as a 
percentage of

[[Page 22105]]

total producer revenue would be approximately 0.9 percent ($50,000 
divided by ($5.42 x 1,000,000 cartons) x 100%).
    This action increases the assessment obligation imposed on 
handlers. While assessments impose some additional costs on handlers, 
costs are minimal and uniform on all handlers, and some portion of the 
additional costs may be passed on to producers. However, these costs 
are expected to be offset by benefits derived by the operation of the 
Order.
    The Committee's meeting was widely publicized throughout the Texas 
citrus industry. All interested persons were invited to attend the 
meeting and participate in Committee deliberations on all issues. Like 
all Committee meetings, the July 14, 2021, meeting was a public meeting 
and all entities, both large and small, were able to express views on 
this issue.
    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the Order's information collection requirements have been 
previously approved by OMB and assigned OMB No. 0581-0189 Fruit Crops. 
No changes in those requirements are necessary as a result of this 
rule. Should any changes become necessary, they would be submitted to 
OMB for approval.
    This rule imposes no additional reporting or recordkeeping 
requirements on either small or large Texas orange and grapefruit 
handlers. As with all Federal marketing order programs, reports and 
forms are periodically reviewed to reduce information requirements and 
duplication by industry and public sector agencies. As noted in the 
initial regulatory flexibility analysis, AMS has not identified any 
relevant Federal rules that duplicate, overlap, or conflict with this 
rule.
    AMS is committed to complying with the E-Government Act, promoting 
the use of the internet and other information technologies to provide 
increased opportunities for citizen access to Government information 
and services, and for other purposes.
    A proposed rule concerning this action was published in the Federal 
Register on November 18, 2021 (86 FR 64408). Copies of the proposed 
rule were also mailed or sent via email to all Texas citrus handlers. 
The proposal was made available through the internet by AMS and the 
Office of the Federal Register. A 30-day comment period ending December 
20, 2021, was provided for interested persons to respond to the 
proposal.
    No comments were received. Accordingly, no changes will be made to 
the rule as proposed.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at: 
https://www.ams.usda.gov/rules-regulations/moa/small-businesses. Any 
questions about the compliance guide should be sent to Richard Lower at 
the previously mentioned address in the FOR FURTHER INFORMATION CONTACT 
section.
    After consideration of all relevant material presented, including 
the information and recommendation submitted by the Committee and other 
available information, it is hereby found that this rule will tend to 
effectuate the declared policy of the Act.

List of Subjects in 7 CFR Part 906

    Grapefruit, Marketing agreements, Oranges, Reporting and 
recordkeeping requirements.

    For the reasons set forth in the preamble, the Agricultural 
Marketing Service amends 7 CFR part 906 as follows:

PART 906--ORANGES AND GRAPEFRUIT GROWN IN LOWER RIO GRANDE VALLEY 
IN TEXAS

0
1. The authority citation for 7 CFR part 906 continues to read as 
follows:

    Authority: 7 U.S.C. 601-674.


0
2. Section 906.235 is revised to read as follows:


Sec.  906.235  Assessment rate.

    On and after August 1, 2021, an assessment rate of $0.05 per 7/10-
bushel carton or equivalent is established for oranges and grapefruit 
grown in the Lower Rio Grande Valley in Texas.

Melissa Bailey,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2022-07975 Filed 4-13-22; 8:45 am]
BILLING CODE P